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Mount Vernon hears energy-market briefing as aggregation contract nears expiration
Summary
Palmer Energy presented trends in the PJM market and recommended a short-term aggregation strategy after the city's current electric aggregation rate expires at the end of the year; officials warned household bills could rise $30-$40 per month under current market conditions.
A market briefing from Palmer Energy at TuesdayCity Council committee warned that wholesale electricity market shifts and rising generation capacity costs are likely to push residents' bills higher after the city's current aggregation contract expires at the end of the year.
Mark Frey, president of Palmer Energy, told the committee that the cityaggregation contract locked a favorable rate five years ago but that capacity-market prices (PJM RPM) have spiked recently. "Prices have gone a little bit bananas," Frey said, and he pointed to an increase in generation capacity auction prices and rising demand from data centers as primary drivers. He said PJM's capacity auction moved from roughly $30 per megawatt-day to $270, and subsequently to higher levels in a later auction.
Frey described several consequences: higher generation-capacity charges that all customers must pay, large new loads from data centers and other industrial demand, and transmission investments that utilities are seeking to recover. He advised the city to pursue a shorter-term fixed aggregation supply contract (minimum 12 months for residential customers under PUCO rules) rather than a long-term multi-year lock at current record-high prices. Asked for a ballpark figure of household impact, Frey estimated an average residential customer could see roughly $30 to $40 a month added to bills compared with current aggregation participants.
Council members asked about pooling accounts with neighboring jurisdictions; administration staff said partnering with Fredericktown (and potentially Licking and Muskingum counties) could expand purchasing power. Palmer Energy said longer fixed contracts are available in some cases but recommended shorter terms now because of market volatility; no action or contract award was taken at the committee meeting.
